Claire’s French unit faces legal action amid accusations of financial misconduct

Claire’s France, the French subsidiary of U.S. accessories retailer Claire’s, was placed in receivership by the Paris Commercial Court on July 24. At a time when its parent company is facing global financial pressure, it has announced its intent to withdraw from the French market. While a call for tenders was launched to seek potential buyers, the French staff’s social and economic committee (CSE), with support from the CFDT and CFE-CGC unions, filed a complaint with the French National Financial Prosecutor’s Office (PNF) on September 3. The complaint accuses the group of “serious irregularities in the management of the company”, citing what they describe as “artificial insolvency” and “opaque intra-group financial flows”.

In a letter addressed to the PNF and the public prosecutor, reviewed by FashionNetwork.com, the staff representatives alert authorities to a situation they believe could “characterize several economic and financial offenses within the framework of the receivership procedure.” More than 1,000 employees across 250 stores are now facing redundancy, even though Claire’s France had posted a net profit of €1.3 million just a year prior. The complaint argues that “no exceptional event justifies the transition from profitability to a declaration of cessation of payments in less than six months.”

The CSE’s lawyers allege suspicious financial activity, pointing to intra-group cash transfers that “rapidly and inexplicably drained” the French subsidiary’s funds. These transactions, they state, were executed by Claire’s group—whose parent company is based in the United States—without transparency or proper documentation, and “to the detriment of the French subsidiary’s social and financial interests.”

According to the legal filing, the pace and opacity of the transfers raise concerns about whether written agreements between subsidiaries even exist. The document also questions the French entity’s compliance with tax reporting obligations, suggesting possible “tax evasion organized by the Claire’s group, which two American pension funds control.” The lawyers claim that the group “literally emptied the coffers” of the French unit, without presenting any evidence of transfer pricing agreements or intra-group support mechanisms.

French law requires companies undergoing receivership to provide employee representatives with documentation outlining the causes of financial distress. However, the CSE claims it has not received the file submitted to the commercial court, nor the full financial details necessary to verify the company’s insolvency claims.

The complaint also highlights Claire’s complex capital structure. Claire’s France is owned entirely by Claire’s UK, which is in turn owned by the Swiss subsidiary. The Swiss company is controlled by Claire’s Holding (Luxembourg), itself owned by a company based in Gibraltar. The lawyers argue that “this layered structure, combined with opaque intra-group financial flows, enables fund transfers out of France without contractual justification and creates the conditions for artificial insolvency.”

The National Financial Prosecutor’s Office has jurisdiction over complex financial crimes, including misappropriation of corporate assets, fraudulent bankruptcy, breach of trust, and aggravated tax fraud.

In the retail sector, a similar case surfaced in April 2023, when a judicial investigation was launched into Financière Immobilière Bordelaise and its owner, Michel Ohayon—the buyer of Camaïeu and Go Sport—for the misuse of corporate assets, bankruptcy, aggravated fraud, and organized money laundering.